Macro Roundup (Jul 16)

SHANGHAI, Jul 16 (SMM) – This is a roundup of global macroeconomic news last night and what is expected today.

Last night

Poor summer trades bolstered the US dollar, with its upside potential limited by expectations that the Federal Reserve will cut interest rates at next week’s policy meeting. Investors expect the Fed to reduce its key rate by 25 basis points and to make another cut in September.

The Australian dollar, the currency most sensitive to Chinese news, hit a week-high on encouraging economic data from China.

Base metals ended mostly higher as LME aluminium climbed 0.8%, nickel and copper rose 0.7%, zinc increased 0.2%. lead grew 0.1%, while tin extended losses by 2%. SHFE nickel advanced 1.5%, lead rose 0.8%, zinc gained 0.4%, copper and aluminium went up 0.3%, while tin lost 0.6%. 

China’s industrial output grew 6.3% in June from a year earlier, official data showed on Monday, picking up from a 17-year low in May and beating market expectations of a 5.2% rise. 

Fixed-asset investments for the first half of the year rose 5.8% from a year earlier, according to data published by the National Bureau of Statistics (NBS), compared with an expected increase of 5.6%. 

Private sector investment in fixed assets, which make up 60% of China's total investments, rose 5.7% in January-June, compared with a 5.3% rise in January-May.

Retail sales for June rose 9.8% in annual terms. Analysts had expected growth to cool to 8.5% from 8.6% in May.

China’s economy grew 6.2% year on year in April-June, in line with the government's annual target of 6-6.5% set for 2019, the NBS said on Monday. The growth in the second quarter was the slowest in 27 years, with weak domestic and external demand and a trade war with the US.

Day ahead

The eurozone will release its trade balance and the ZEW indicator of economic sentiment for May. 

US retail sales, import price index, industrial production data for June, as well as its weekly crude oil inventory data by the American Petroleum Institute (API) are due today.